Asian Stock Bubble Bursting? More Food Inflation.

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I knew something was wrong somewhere, but I couldn’t spot it exactly. But if something was coming and I didn’t know where from, I couldn’t be on my guard against it. That being the case I’d better be out of the market.

Jesse Livermore.

In the stock casinos, did the Asian stock bubble just burst, due to a growing property bust?

What does it mean for the US stock bubble if it did just burst?

Hong Kong stocks tumble 2% dragged by property and tech; Asia markets mixed

UPDATED MON, JUL 17 2023 11:24 PM EDT

Asia-Pacific markets were mixed as Hong Kong stocks led losses in the region, tumbling by 2% and dragged by real estate and technology stocks.

Mainland Chinese markets were also in negative territory, with the Shanghai Composite down 0.4% and the Shenzhen Component falling 0.45%.

In Australia, the S&P/ASX 200 was 0.46% down as investors digest minutes from the Reserve Bank of Australia’s July meeting.

The Nikkei 225 climbed marginally and the Topix rose 0.32%. Japanese investors are bracing for key economic data later this week, including its trade balance and consumer price index figures for June.

South Korea’s Kospi slipped 0.57%, but the Kosdaq was up 1.04% as the country holds its first Nuclear Consultative Group meeting with the U.S. today.

The meeting will “discuss information sharing, consultation mechanism and joint planning and execution designed to bolster nuclear deterrence against North Korea.” Yonhap reported, citing South Korea’s presidential office.

Overnight in the U.S., all three major indexes climbed as investors braced for the second quarter earnings season.

The Dow Jones Industrial Average added 0.22% to reach its highest closing level in 2023, while the S&P 500 climbed 0.39%, while the Nasdaq Composite saw the largest gain 0.93%.

Hong Kong stocks tumble 2% dragged by property and tech; Asia markets mixed (cnbc.com)

Stock futures inch lower ahead of busy earnings day: Live updates

UPDATED MON, JUL 17 2023 7:55 PM EDT

Stock futures were little changed in overnight trading as Wall Street looked ahead to a busy earnings day.

Futures tied to the Dow Jones Industrial Average dipped 21 points, or 0.06%, while S&P 500 futures and Nasdaq-100 futures slipped 0.1% and 0.13%, respectively.

Stocks are coming off a winning session that saw the Dow Jones Industrial Average rise for a sixth straight day and gain 76.32 points, or 0.22%, to notch its highest close of the year. The S&P 500 and Nasdaq Composite jumped 0.39% and 0.93%, respectively.

Six of the 11 major S&P sectors finished Monday with losses, led to the downside by utilities, which fell 1.18%. Elsewhere, AT&T shed 6.7% to touch its lowest levels since 1993. The action followed a downgrade from Citi on the heels of an investigation by The Wall Street Journal that linked the telecom company to toxic lead cable use.

Wall Street awaits a packed earnings day Tuesday, with results on deck from Bank of America, Morgan Stanley, Bank of New York Mellon and PNC Financial. Earnings from Lockheed Martin and J.B. Hunt are on deck.

The season comes as recent inflation data boosts the case for a soft-landing scenario among many investors, and stocks continue this year’s rally. But some skepticism lingers.

“I don’t think we’re in a sweet spot,” SoFi’s Liz Young said Monday on CNBC’s “Closing Bell.” “You wouldn’t have those negative leading indicators, and even some of the concurrent indicators, if we were in a sweet spot.”

On the economic front, retail sales and industrial production data for June are due out Tuesday.

Stock market today: Live updates (cnbc.com)

China property investment slide deepens in June as structural shift inflicts pain

PUBLISHED MON, JUL 17 2023 2:43 AM EDT

Property investment in China slid nearly 8% in the first half of the year, official data showed Monday, marking a deepening decline for a sector that accounts for up to a quarter of the world’s second-largest economy.

The National Bureau of Statistics said the sector will gradually stabilize as the broader economy recovers, and is shifting from high-speed development to stable development in the medium to long term.

The country’s property sector is struggling to emerge from a credit crisis after the government cracked down on its debt levels in August 2020. Years of exuberant growth has led to the construction of ghost towns where supply outstrip demand, as developers look to capitalize on the desire for home ownership and property investment.

The 7.9% drop in investment for January to June was steeper than the 7.2% drop reported for January to May. Last month, China’s second-largest developer China Vanke said the sector is “indeed under pressure in the short term” and that the situation is “worse than expected,” according to a CNBC translation.

“This year, due to major drag from the housing markets and consumption, we actually didn’t see the kind of rebound in broader economic growth,” Dan Wang, chief economist at Hang Seng Bank (China), told CNBC’s “Street Signs Asia” on Monday. China second-quarter growth came in at 6.3% from a year before and 0.8% from the quarter before, underwhelming market expectations yet again.

“Of course it justifies a little bit bigger... fiscal and monetary stimulus, but if you look at the whole year, even with 6.3% growth in Q2, we can still reach 5% annual growth without a big problem,” she added.

More

China property investment slide deepens in June as structural shift inflicts pain (cnbc.com)

China logs 52.2 Celsius as extreme weather rewrites records

July 17, 20236:59 AM GMT+1

BEIJING, July 17 (Reuters) - A remote township in China's arid northwest endured temperatures of more than 52 Celsius (126 Fahrenheit) on Sunday, state media reported, setting a record for a country that was battling minus 50C weather just six months ago.

 

Temperatures at Sanbao township in Xinjiang's Turpan Depression soared as high as 52.2C on Sunday, state-run Xinjiang Daily reported on Monday, with the record heat expected to persist at least another five days.

 

The Sunday temperature broke a previous record of 50.3C, measured in 2015 near Ayding in the depression, a vast basin of sand dunes and dried-up lakes more than 150 m (492 ft) below sea level.

 

Since April, countries across Asia have been hit by several rounds of record-breaking heat, stoking concerns about their ability to adapt to a rapidly changing climate. The target of keeping long-term global warming within 1.5C is moving out of reach, climate experts say.

 

Prolonged bouts of high temperatures in China have challenged power grids and crops, and concerns are mounting of a possible repeat of last year's drought, the most severe in 60 years.

 

China is no stranger to dramatic swings in temperatures across the seasons but the swings are getting wider.

 

On Jan. 22, temperatures in Mohe, a city in northeastern Heilongjiang province, plunged to minus 53C, according to the local weather bureau, smashing China's previous all-time low of minus 52.3C set in 1969.

 

Since then, the heaviest rains in a decade have hit central China, ravaging wheat fields in an area known as the country's granary.

 

This week, the United States and China are looking to rekindle efforts to fight global warming, with U.S. special climate envoy John Kerry in Beijing holding talks with his Chinese counterpart Xie Zhenhua.

China logs 52.2 Celsius as extreme weather rewrites records | Reuters

Finally, more food price inflation to come it seems.

Russia halts grain deal in what UN calls blow to needy people everywhere

July 18, 20233:18 AM GMT+1

KYIV, July 17 (Reuters) - Russia halted participation on Monday in the year-old U.N.-brokered deal that lets Ukraine export grain through the Black Sea, causing concern in poorer countries that price rises will put food out of reach.

Hours earlier, a blast knocked out Russia's bridge to Crimea in what Moscow called a strike by Ukrainian sea drones, killing two people. Moscow said it was a terrorist attack on the road bridge, a major artery for Russian troops fighting in Ukraine.

The Kremlin said there was no link between the attack and its decision to suspend the grain deal, over what it called a failure to meet its demands to implement a parallel agreement easing rules for its own food and fertilizer exports.

"Unfortunately, the part of these Black Sea agreements concerning Russia has not been implemented so far, so its effect is terminated," Kremlin spokesman Dmitry Peskov told reporters.

 

U.N. Secretary-General Antonio Guterres signalled that Russia's withdrawal meant that the related pact to assist Russia's grain and fertilizer exports was also terminated.

 

"Today's decision by the Russian Federation will strike a blow to people in need everywhere," he told reporters.

 

Moscow said it would consider rejoining the grain deal if it saw "concrete results" on its demands but that its guarantees for the safety of navigation would meanwhile be revoked.

 

Ukraine and Russia are some of the world's biggest exporters of grain and other foodstuffs and any interruption could drive up food prices across the globe.

 

Shashwat Saraf, the emergency director in East Africa for the International Rescue Committee (IRC), said the impact would be profound in Somalia, Ethiopia and Kenya, which have been facing the Horn of Africa's worst drought in decades.

More

Russia halts grain deal in what UN calls blow to needy people everywhere | Reuters 

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Transatlantic inflation gap set to hit highest level in decades 

UK figures poised to show rate of price increases is almost three times as high as in the US

July 17, 2023

The gulf between price pressures in the US and the UK is likely to widen to levels not seen since the late 1970s this week, as Britain increasingly becomes a global inflationary outlier.

Figures out last week confirmed US consumer price inflation is abating fast, with the annual figure for June falling to a two-year low of 3 per cent.

That contrasts with economists’ expectations that last month’s CPI reading for the UK, due out on Wednesday, will come in at above 8 per cent. 

As of Friday afternoon, economists polled by Reuters expected, on average, a figure of 8.2 per cent for June. If they are right, that would mean UK inflation is now 5.2 percentage points higher than in the US — the widest gap since November 1977, when the country was beset by economic stagnation and political strife.

“The drop in US inflation shines a light on the UK’s persistent inflation problem,” said Victoria Scholar, head of investment at Interactive Investor, an online investment service.

Economists blame a combination of EU-style high energy prices and US-style labour shortages for the UK becoming the G7 economy most plagued by inflation.

“Inflation is higher in the UK than the US because it has suffered a worse energy shock, worse labour shortages, and goods inflation rose later and subsequently started to fall later than in the US,” said Simon MacAdam, economist at research firm Capital Economics.

Food price inflation, another important aspect of the surge in global prices, has also fallen faster in the US and much of Europe — partially because of Britain’s reliance on imports and weather limiting crop supplies.

Historically the US and UK inflation measures have tended to track one another. However, over the past year, a gap has emerged.

US inflation began declining during the autumn of 2022 after hitting its highest level in decades last June on the back of falling energy costs and slowing food inflation, while UK inflation continued to climb during the autumn on the back of a surge in European energy prices and accelerating services price growth.

While UK inflation has declined since hitting a peak of 11.1 per cent in October, it has done so less dramatically than elsewhere in Europe.

In the eurozone, where inflation hit a high of 10.6 per cent last October, the annual rate is now 5.5 per cent with price growth in Spain falling even below the European Central Bank’s target of 2 per cent.

More

Transatlantic inflation gap set to hit highest level in decades  | Financial Times (ft.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Affordable Diabetes Drug Reduces Long-COVID Risk by 41 Percent: Study

July 16, 2023

Is there a way to prevent long COVID? A new study in the United States found that taking metformin, an affordable first-line Type 2 diabetes drug, shortly after diagnosis of COVID-19 can reduce the risk of developing long COVID by about 41 percent.

 

The study was conducted by researchers from the University of Minnesota, and the paper was published in the international medical journal The Lancet Infectious Diseases in June.

Long COVID refers to persistent discomfort for weeks or months after being infected with COVID-19. Common symptoms include fatigue, shortness of breath, cognitive impairment, headache, chest pain, and joint pain, among others, which affect daily life.

Through remote recruitment, the researchers screened 1,126 participants who agreed to long-term follow-up. They were overweight and obese people aged 30 to 85, had symptoms of COVID-19 infection for fewer than seven days, tested positive for COVID within three days of trial enrollment, and had no previous known SARS-CoV-2 infection.

In this randomized trial, about half of the participants took metformin, and the other half took a placebo. They were also randomly assigned to receive either ivermectin, fluvoxamine, or placebo.

After 300 days of follow-up, 10.4 percent of participants who took the placebo were diagnosed with long COVID, while 6.3 percent who took metformin were also diagnosed.

The results of the study showed that taking metformin reduced the risk of developing long COVID by 41 percent. In subjects who took metformin within three days of symptom onset, the risk of developing long COVID was reduced by 63 percent.

The study also proved that taking metformin reduced the risk of developing long COVID in people infected during the peak period of the three SARS-CoV-2 variants, Alpha, Delta, and Omicron.

However, the study found that taking ivermectin or fluvoxamine showed no signs of protection against long COVID.

Metformin, originally developed from the French lilac (Galega officinalis), is inexpensive and has no significant side effects. For decades, it has been the drug of choice for Type 2 diabetes treatment worldwide.

More

Affordable Diabetes Drug Reduces Long-COVID Risk by 41 Percent: Study (theepochtimes.com)

Covid-19 in Bulgaria: Omicron strain found in all 94 samples – NCIPD

 July 17, 2023

Bulgaria’s National Centre for Infectious and Parasitic Diseases (NCIPD) has announced the results of sequencing the latest group of samples taken from Covid-19 patients in the country and said that it found the Omicron coronavirus strain in all 94 samples.

NCIPD said that the samples, taken over a period of time ranging from April 28 to May 25 in 13 out of Bulgaria’s 28 districts, showed that the XBB.1.5 lineage and related subvariants, which NCIPD collectively referred to as XBB.x, remained the dominant one in Bulgaria.

XBB.1.5 is a sub-lineage of XBB, which evolved from two earlier lineages of Omicron, with an additional spike change, according to the European Centre for Disease Prevention and Control (ECDC).

ECDC has currently designated XBB and XBB.1.5-like sublineages as variants of interest and XBB.1.16 as a variant under monitoring.

 

NCIPD’s latest sequencing dataset showed the XBB.x lineage was present in 51 cases or 54.3 per cent of the samples, compared to 53.3 per cent of the samples in the previous batch sequenced by NCIPD, the results of which were announced on June 2.

The remaining samples were 14 cases of the EG.x lineage, 13 cases of the FL.x lineage, six cases each of the EU.x lineage and XBW subvariant, two cases of the BN.x lineage, as well as one case apiece of the FH.1 and FY.1.2 subvariants.

As of May 30, seven patients in the NCIPD sample group had died, 11 were in hospital and nine were undergoing home treatment, with 67 recovered, NCIPD said.

Covid-19 in Bulgaria: Omicron strain found in all 94 samples – NCIPD – The Sofia Globe

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Batteries, not blackouts: California's power grid gets boost from battery energy

July 14, 2023

SACRAMENTO – As California increases its reliance on renewable energy sources like solar and wind, there's a concern that there may not be enough energy during certain seasons and times of the day to keep the lights on.

But this summer, the state is setting a major milestone in energy storage.

California now has the capacity to store 5,600 megawatts of power using batteries. That's enough to supply more than 4 million homes.

"There's such an important factor that battery energy storage plays," said Paul Doherty with PG&E. 

Doherty says the growth of battery storage capacity over the last three years has been exponential.

"In August of 2020, PG&E had 6.5 megawatts of battery energy storage on the grid, and today we have approximately 1200 megawatts," Doherty said.

So why is battery storage needed in California?

"Solar and wind, these are intermittent resources," Doherty said.

Batteries can help provide power in the winter when there's less sunshine – or on summer evenings when it's still hot outside.

"Those peak periods during 4 to 8 p.m. when everyone's getting home [and] starting to use their appliances … the demand for energy really spikes," Doherty said.

Companies like ESS are building large-scale batteries in Sacramento that can also be used as a backup power source for critical sites.

There's now so much battery storage, California Independent System Operator – managers of the state's power grid – has changed its day-to-day monitoring procedures to track how much "charge" is left in the battery fleet.

Building more batteries is the latest effort to ensure California has 100 percent clean energy by the year 2045.

Cal-ISO says the record-breaking amount of snowpack this year is also helping provide more hydroelectric power this summer across the state.

Batteries, not blackouts: California's power grid gets boost from battery energy (msn.com)

I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.

Jesse Livermore.